South Korean shares closed up 1.4 percent on Tuesday after leaders of European Union (EU) member nations reached a massive stimulus package deal to support pandemic-hit economic activities. The Korean won rose against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) rose 30.63 points, or 1.39 percent, to close at 2,228.83. Trading volume was high at about 906 million shares worth some 15.5 trillion won ($12.9 billion), with gainers outnumbering losers 565 to 279.

Foreigners bought a net 437 billion won, and institutions purchased a net 146 billion won. Retail investors sold a net 562 billion won.

The KOSPI got off to a strong start on hopes of COVID-19 vaccine development and extended gains on the EU's $2.1 trillion stimulus package.

"The EU's agreement on the stimulus package increased optimism for a global economic rebound," Lee Won, an analyst at Bookook Securities, said. The analyst said the EU deal is expected to boost foreign investors' appetite for risky assets and keep the KOSPI on the rise for a while.

In Seoul, most large caps closed higher.

Market bellwether Samsung Electronics jumped 2.03 percent to 55,300 won, with No. 2 chipmaker SK hynix adding 2.31 percent to 84,100 won.

Leading pharmaceutical firm Samsung BioLogics advanced 1.49 percent to 750,000 won, while Celltrion slipped 0.46 percent to 321,500 won.

Internet giant Naver gained 2.66 percent to 270,000 won, with its rival Kakao rising 1.94 percent to 316,000 won.

Top automaker Hyundai Motor stayed flat at 121,500 won.

The local currency closed at 1,197.8 won per dollar, up 5.4 won from the previous session's close. 

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 1.7 basis points to 0.818 percent, and the return on the benchmark five-year government bond added 1.8 basis points to 1.084 percent. (Yonhap)